The World Inequality Report

by Max Lawson, Head of Inequality Policy,  Oxfam International

This week saw the launch of the first ‘World Inequality Report’ written by the team at the Paris School of Economics and based on the data collected by over 100 researchers behind the World Incomes Database.  The summary is very short and full of fantastic charts, well worth taking a look at.  They have pioneered the use of tax data and other sources to recalculate the incomes of those at the top, which are hugely underestimated. They have now done this for enough large countries to make some conclusions about global trends, which is the basis of the report.

This chart shows projections of the impact of different inequality scenarios on global poverty, one assuming countries follow the trajectory of the EU, which has been one of the most positive in terms of inequality.  The second is if countries follow the course they have been following to date, and the final scenario is if countries follow the trend taken by the US.  Average incomes could be double if a more equal path is pursued. Their main message, as with our Commitment to Reduce Inequality Index, is that inequality is not inevitable; it is a policy choice.

I had the opportunity to attend the conference in Paris over the last two days and there were many fascinating presentations from a veritable who’s who of the inequality world.  One of my favourite moments was when the researcher from Germany said she had struggled to establish a clear record for the incomes of the top 1% in Germany since 1871, because ‘the geography of Germany has changed somewhat over the last century’.  With that kind of  quality understatement she should be British.  Many of the presentations are available here – there may well be one about your country, so worth looking at.  This one about India  based on analysis by Lucas Chancel and Thomas Piketty was pretty impressive, showing how inequality in India has risen back to levels not seen since the days of the British Raj.